Home Buying in Ypsilanti>Question Details

Christina, Home Buyer in Wilmington, DE

Buyer Agency Contract-Broker acting as Dual Agent

Asked by Christina, Wilmington, DE Thu Feb 5, 2009

I'm confused. I made an offer on a foreclosed property in Ypsilanti without a buyer's agent. The listing agent acted as a Dual Agent for the negotiations. It was a bad experience and I didn't get the property. I felt as though the agent was acting in the best interest of the bank and not me.

So, I signed an Exclusive Contract with a Buyer's Agent who I thought would represent me. However, #9 on the Exclusive Buyer Agency Contract states that "Broker shall act as disclosed dual agent of both Client and the owner of the real property listed." What does this mean in terms of my relationship with my agent?
I only ask the question because I'm in negotiations on another foreclosed property and, at times, my agent doesn't appear to be acting in my best financial interests.

So, who is my agent working for? Me or the seller (Freddie Mac)?

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Answers

8
Christina,

First, the agency relationship you have is determined by the relationship with the brokerage, not the individual agent.

Second, the real estate industry has worked to make agency relationships confusing so don't feel bad.


Most of the larger brokerages in the Ann Arbor / Ypsilanti area practice what is called "designated buyer agency". In this case the broker "designated" one "agent" and a "supervisory broker" to work for you. Everybody else in the brokerage can work against you either with other buyers or with sellers.

If someone else in the brokerage is the listing agent of a property you are interested in, then the brokerage and any supervisory brokers are dual agents.

If the "designated buyer agent" you are working with has the listing you are interested in, then that designated agent turns into a dual agent.

Dual agents legally can't help you with negotiation or valuation, and they legally can't help you in any way that can impact negatively on the seller. And the same should apply to their work for the seller against you. They shouldn't be giving a bank better treatment just because they will be doing more business with that bank.

That said, I can also tell you that many members of our Board of REALTORs are confused about agency and even if they understood it they may not effectively represent you. Many "designated buyer agents" in our market are just focused on getting you to buy a home as fast as possible.

The fact that so many members call themselves "buyer agents" when they are actually "designated buyer's agents" is an example of either unethical behavior or general confusion.

So I hope that helps you understand what the agent should be working for, however that may not be how they are actually behaving.

If you would like to know more, or if you would like to talk to a company who will represent you and never become a dual agent or a seller's agent, you can contact our company.

We are an Exclusive Buyer Agency. That is defined by NAEBA and NAR as "a company who only works for buyers. The company never takes listings and never works for sellers."

Jon Boyd
Broker/Manager
The Home Buyer's Agent of Ann Arbor, Inc.
1908 W. Stadium Blvd.
Ann Arbor, MI 48103
0 votes Thank Flag Link Wed Apr 1, 2009
Hi Christina,

Your individual agent can not be a dual agent unless you sign a dual agency agreement- which it does not state in your message above that you have done this. Now- if you make an offer on a property that is listed with Keller Williams with a Keller Williams agent (who is not the listing agent of the particular property you made an offer on) then the Broker AKA- Keller Williams is a dual agent, but not your agent in particular, unless you sign the agreement of dual agency form- which is a separate form altogether. Hope this helps.

I would also stress that even if your agent has nothing to say he/she should still communicate with you.

Please contact me should you have additional questions.

Good luck with your home search!
Web Reference: http://www.bouma.com
0 votes Thank Flag Link Thu Feb 5, 2009
If the agent is a disclosed dual agent, they are working for both of you; however, you need to realize that if they are representing the bank, they have a long standing relationship with the bank and will continue to list their properties. . . hummmmmmm . . . You REALLY NEED TO GET A BUYER AGENT who is working exclusively for you. When someone is a dual agent, they are doing what is necessary to facilitate the transaction, but they are bound by law to keep confidential things that each party tells them. It is a narrow line to walk and very difficult. Many Realtors won't even put themselves into this situation and will refer out the buyer. Make yourself comfortable and sign an exclusive buyer agency with a Realtor who is working EXCLUSIVELY for you. Prudential is a national company, if you would like me to make a recommendation, let me know.
Web Reference: http://ReneeBadall.com
0 votes Thank Flag Link Thu Feb 5, 2009
It's really difficult to tell, Christina, from your letter, exactly what's going on. And without reading the entire EBA (Exclusive Buyer Agreement) I'm not sure... but... it might be that the EBA says something to the effect of:

The undersigned agent (your agent) represents you as the buyer... BUT in a case where your agent might already represent the seller (if he's the listing agent on that property) then the BROKER (his boss) would then step in and act as the disclosed "dual agent".

Just a possibility...
0 votes Thank Flag Link Thu Feb 5, 2009
Alan May, Real Estate Pro in 60201
MVP'08
Contact
Christina,

You really should find a real estate agent who is working with you personally. It sounds as if you are contacting listing agents of properties and expecting them to be fully committed to you, when in truth, they already have an obligation to work for the seller.

When you signed Buyer's Agency Agreement you apparently gave the Listing Agent the right to represent both you and the bank. That can be fine if you are working for a dedicated agent who can do a stellar job of juggling the responsiblities. You are obviously not satisfied with this agents performance.

If this agent is not out there searching for other great homes for you...ones that are not just her own listings...then you should get this agent to release you from your contract and find a new agent.

Search your area for an experienced real estate agent who has at least 5 years of experience and who has the passions and enthusiasms for finding great deals on homes. Foreclosures are no longer the best place to find good deals in some areas, although they can be wonderful in other locations. You need an agent who is out there hunting for homes for you and who knows the intricacies of negotiating deals with both personal sellers....and with financial institutions.

If your current Buyer's Agent does not agree to let you out of your contract then read the fine details of the agreement. Most will say that she must provide you with regular updates on new homes coming on the market that fit your list of priorities. If she is not performing adequately talk to her broker and get the release...but by all means get this issue resolved before you buy a home or you could end up owing money in commissions to this agent even if you do not use her for your purchase.

Good Luck in getting it all worked out and finding a personal agent who works great for you!
0 votes Thank Flag Link Thu Feb 5, 2009
I personally don't like dual agency although it is a form of Agency Relationships in Michigan.

Since you signed an EBA Contract with a different agent, is this agent the listing agent. If not then she can represent you as a Buyer Agent.

If they are then once again you are in a Dual Agency Situation.

That is probably just the language in the contract should this situation occur.

When you are dealing with banks you just don't get quick or timely responses to your offer, so perhaps your Buyer Agent just has nothing new to update you on.
Web Reference: http://AnnArborAreaMLS.com
0 votes Thank Flag Link Thu Feb 5, 2009
Is the property that you are offering on listed by your buyer's agent? Did your agent disclose that he/she represents the seller?

If the answers to those questions is "no" then your agent's fiduciary responsibility is to you and you alone. Your agent should be working for you. If you have concerns about him or her not working in your best interest, I would discuss them with the agent or their managing broker.

Offers on REO's are very different from traditional retail transactions. The negotiations are less interactive. You agent might be acting in your best interest, but sometimes what I am seeing now is that buyers have been given incorrect information about how banks are dealing with these properties. This information usually comes from their friends and the media. People are hearing about great deals and assume they will get everything for half off the listing price. This does happen, but more often than not the bank is looking to get something closer to list price.
Web Reference: http://miOaklandCounty.com
0 votes Thank Flag Link Thu Feb 5, 2009
Maureen Fran…, Real Estate Pro in Birmingham, MI
MVP'08
Contact
Christina,

Sorry to hear abour your predicament, but you ask a great question!

The ONLY way a true, "dual agency," can exist is if an agent has a previous Buyer Agency relationship with a client, and a prior Seller Agency with a client, before the two come together. If, for instance, you contact a listing agent about a particular property they have listed without having a buyer agency in-place prior to the contact, no dual agency can exist, in theory, and it shouldn't exist in practice.

As to your question about your new agency contract, there has to be more to it. Is there a header above that possibly mentions that IF the broker has a property involved that you want to pursue, then the broker shall act as a disclosed dual agent? On its own, that sentence doesn't make much sense and there has to be something else to it.

If none of what you are currently working on materializes, please do contact me. We take our responsibilities very seriously, and we understand and operate within the legal and ethic confines that are necessary.

Hope that helps! Stay warm out there today...


Derek Bauer, Associate Broker / Realtor
Real Estate One
734.678.4745 - direct
Derek@DoorToDreams.com
http://www.DoorToDreams.com
Web Reference: http://www.DoorToDreams.com
0 votes Thank Flag Link Thu Feb 5, 2009
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